October 17, 2008, Newsletter Issue #30: How the Definitions of Disability Differ with Private and Governmental Insurance Programs

Tip of the Week

Private, state, and/or federal disability programs can have different definitions for disability. This language might differ in the terminology and/or measurement of your injury or illness.

For example, the definition of total disability by government insurance plans is a standard provision that applies to all people covered by one or more of these programs. Should you have purchased a private disability insurance policy, tailored to your occupation or profession, you may have a definition of total disability that differs from government plans, like Social Security Disability Insurance (SSDI) or Workers Compensation insurance.

The definitions of permanent versus temporary disability may also differ. In reality, SSDI has no definable provision for any short term disability, which at times hinders one’s ability to qualify for temporary disability benefits with this government program. On the other hand, Workers Compensation coverage is much more temporary disability friendly, so to speak. Yet, the specific definitions within a government program may widely differ from the language you’ve chosen for your individual coverage.

This difference is very important in the area of residual disability (partial disability) coverage. Your private coverage often allows you to add this provision within your contract or by adding a rider to your basic coverage. You do not enjoy this often valuable option with state or federal disability coverage. While everyone appreciates the government’s efforts to protect its citizens, you should consider opting for your own individual disability insurance to best protect your current and future earnings.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

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